Yet Another Funding Round For Kenya’s Twiga Foods As It Secures USD 30 Mn, With Goldman Sachs Acquiring Stake In It
Twiga Foods, a Kenyan B2B m-commerce platform connecting farmers and food manufacturers to retailers has raised USD 30 Mn in a series B round.
Of the funding, USD 23.75 Mn was an equity round led by American investment bank, Goldman Sachs with participation from existing investors; International Finance Corporation (IFC), TLcom Capital and Creadev. The remaining USD 6 Mn was a debt financing round from Overseas Private Investment Corporation (OPIC) and Alpha Mundi.
The secured funding will be used to finance the company’s continued development of proprietary technology and logistics assets. This will in turn help Twiga to roll-out its distribution systems while setting foundations for its expansion into other African cities. Twiga’s logistics systems have been claimed to reduce post-harvest losses to five per cent compared to thirty percent in informal markets where farmers typically sell their produce.
“This funding enables us to invest in our technology and organization to tackle the inefficiencies in Africa’s domestic food production and distribution ecosystems; a USD 300 Bn informal and fragmented market that is estimated to grow to USD 1 Tn by 2030,” said Peter Njonjo, CEO and Co-founder at Twiga Foods.
“With the support of our investors, we are developing technology-driven commercial solutions and cooperating with existing industry players to solve the challenge of food security in Africa.”
According to Njonjo, Goldman Sachs is getting a stake and will also become the lead institutional investor in Twiga as the American investment bank provided the bulk of the funding.
Since its launch in 2014, Twiga Foods has so far sourced food from more than 17 000 producers of both fresh and manufactured foods, delivering this to over 800 retailers. Through its cashless mobile-based platform, vendors are able to place orders on demand from farmers. This way, farmers have a guaranteed market for their produce with timely and fair market prices while the vendors get quality fresh produce at their convenience.
It seems the startup will be closing the year on a good note if its funding deals are anything to go by. In June this year, Twiga Foods received financial backing of USD 5 Mn from Creadev, a long-term investment firm fully funded by one of the richest families in the world- the Mulliez Family of France. This funding went into supporting more small scale farmers in the country.
IFC and TLcom Capital together with the Global Agriculture and Food Security Program (GAFSP) also pumped USD 10 Mn into Twiga Foods late last year.
With Sub-Saharan Africa’s population set to double over the next 30 years, access to reliable and affordable food sources for consumers and guaranteed markets for farmers are essential for effective food distribution.
Speaking on the funding, Jules Frebault, Executive Director at Goldman Sachs said, “Twiga’s innovative model combines technology and modern logistics tailored to the local market to re-engineer the food supply chain. We are delighted to be backing Peter and the highly capable team as they scale operations and drive sustainable access to lower cost quality food on the continent.”
Feature image courtesy: Twiga Foods
